Friday, February 8, 2019

Are VCs needed anymore?

Imagine a world where hundreds if not thousands of people pool as little as $10 each together to invest in startups...

By Will McGuire

Crowdfund Insider just launched an interesting article saying Farewell to Venture Capital at least in the traditional sense where a few determine whether a startup adds value to the masses.  I think there is a space for everyone to play in this amazing disruption occurring with startups and business funding.

About Will McGuire
So are VCs needed anymore? Yes, they are, but because of the new types of exemptions which enable investment crowdfunding, now everyone can participate in startup investing, not just wealthy accredited investors and VCs.

Diversification Strategies of the Wealthy for Everyone

As a middle class American family, my wife and I have diversified our assets using investment crowdfunding since 2016.  We've teamed up with hundreds of investors to participate in $100K rounds to $7MM rounds for startups who are killing it with B2C products, generating new TV series & movies, creating disruptive AgTech, Medical Tech, Fintech, and more.

The reason my family is moving back to our home state is that we want to champion the services that are providing these new economic opportunities to ALL by unlocking the resources of individuals for entrepreneurs.

Everyone can participate...everyone has some value to give and potentially some amazing reward to receive.  Imagine if you had the opportunity to invest in Pendo or Uber or <insert your favorite company> when they were just getting started at $10M, $5M or even $2M valuations.  How would that return impact your family?

Investment crowdfunding also allows individuals to invest in small businesses such as <insert your favorite local coffee shop, restaurant, you name it> and receive a share of the revenue.

Benefit to Startups

Imagine the impact on a startup, when instead of having a few validate their service or product, they have a crowd of hundreds or thousands who not only become their beta product and services testers, but they are economically incentivized by the nature of their investment of $10, $100, $500, $1000, <name your amount> to unlock their connections for startups.  David's on point when he says "All fundraising is the SLOW conversion of your SOCIAL capital into FINANCIAL capital."  Increasing the size of your dedicated social crowd seems to statistically lean in a favorable direction.

Investment crowdfunding allows an unprecedented opportunity for startups and small businesses to pivot their marketing and branding strategies quickly which could be the difference between bankruptcy or success.

It also allows them to connect with individuals who may have a specialty that can help accelerate their growth.  Would they have found this specialty using a traditional VC?...perhaps, but organized diversification provides new opportunities not seen before for startups.

Benefit to Traditional Angels and VCs

Technology is transforming "Traditional" Angels and VCs to "Virtual" Angel and VC Groups.

It is incredibly powerful to be able to aggregate everything needed to make a decision on whether to fund a company through closing the deal all from your preferred device by accessing a single website.

From sourcing deal flow, to vetting and qualifying deals, to finding capital, to having the offering materials automatically generated all in one place, we've only just begun to see the efficiency gains of leveraging online syndicates for investing.


Beyond the $

Everyone should have the opportunity to take the risk of investing in startups to reap the potential reward of freedom the results can provide.  While these financial rewards can be game changing for an individual or a family, it doesn't stop there.  The relationships I've developed with many of the founders I've met (whether I've invested in them or not) go way beyond the $ nature of the investment or the introduction I've made for them.  I like helping value creators...those solving some of our biggest problems of our generation and have had the pleasure of calling several of them my friends.

I look forward to serving all of the value creators and those new to investing out there!  Let me know how I can help. You can reach me at will@crowdfundnc.com.


Monday, December 10, 2018

NC IDEA Foundation and LocalstakeNC Announce a New Grant Program to Support Investment Crowdfunding Campaigns

By Mark Easley

About Mark Easley
NC IDEA Foundation has announced a new grant program that provides grants to North Carolina startups and existing businesses that are preparing investment crowdfunding campaigns to raise capital. NC IDEA has partnered with the North Carolina investment crowdfunding platform LocalstakeNC to help companies cover the costs of creating and promoting an investment crowdfunding campaign on the LocalstakeNC platform.

Investment crowdfunding is a new way for businesses to raise money by selling debt or equity securities to the public using an investment crowdfunding platform like LocalstakeNC. Businesses can sell equity securities including preferred or common stock or SAFEs, or debt securities including convertible notes, revenue share loans, or promissory note loans. Now NC businesses and startups can use new securities laws including the NC PACES Act (raise up to $2M), the Federal JOBS Act Regulation Crowdfunding (raise up to $1M), and Reg A+ (raise up to $50M) to raise funds, and both accredited and non-accredited investors can invest in North Carolina startups and businesses that offer securities using these laws. LocalstakeNC also supports 506(B), 506(C), and 504 offerings.
 

As NC IDEA states in their press release:

"Platforms like Localstake NC have emerged over the last few years to help companies raise investment capital from individual investors. The recent passage of the NC PACES Act gives North Carolina companies another mechanism to raise capital from individuals in a compliant and organized manner. Conversely, these platforms allow all individuals regardless of accreditation to support local companies with their investment dollars. While this mechanism has helped thousands of companies across the country successfully raise capital, to date, few companies in North Carolina have taken advantage of this potential alternative to raising money. Through a competitive application process similar to other Foundation programs, NC IDEA will award $5,000 grants to selected companies wishing to expand their businesses via investment crowdfunding on Localstake NC this Spring. Grant recipients will be supported by NC IDEA and work directly with Localstake NC to have an active fundraiser on their platform by May 2019. Grant funds will be used to pay for platform fees ($2K) with the remainder directed toward supporting marketing materials and other related expenses."

NC IDEA Investment Crowdfunding Grant applications will be open from December 17th to January 28th.

Want to learn more and apply? See the Crowdfunding Grant Announcement here. And you can learn more about the Crowdfunding Grant Program here.

There will be an online webinar hosted by NC IDEA and LocalstakeNC to explain the process and answer questions on December 17th at 1:00pm. You can register for the Crowdfunding Grant Webinar here.

Tuesday, November 13, 2018

How To Build an Audience Before Your Crowdfunding Campaign Launches

About Mark Easley
Here is a very interesting post in Forbes about the importance of building your audience before you launch a crowdfunding campaign and how to do it. Author Evan Marsamis has it right, the marketing work done before your launch is as important as what you do after launch. Rule 1 of Crowdfunding: Create Your Crowd!

From Forbes:

How to Build an Audience Before Launching your Crowdfunding Campaign
By Evan Marsamis



Tuesday, July 17, 2018

Investment Crowdfunding Helps Startups Generate Future VC Funding

How is investment crowdfunding helping generate more and bigger investments by VCs? See my comments in this post on WRALTechwire.
About Mark Easley

The three venture funding reports listed in the article are very interesting posts, and it is great to see this strong trend for our North Carolina businesses. I am sure there are many reasons for the increase in venture funding, including more money than ever is available from existing and new venture funds, and we have a very vibrant and active startup community in the Triangle and around the state.

In my opinion we now truly have one of the top startup ecosystems in the nation, allowing us to rank right up there with places like Austin, Boston, Seattle and Atlanta as places where startups want to be and investors want to invest. The strong consideration of our area by Apple and Amazon reinforces that belief.

Of course I view things from the investment crowdfunding perspective, and I think that has made a contribution to the growth of the venture capital market nationwide in a couple of ways:
  • A larger pool of potential companies for the VCs to back. Many companies that are too early stage for most of the VC community have been able to prove their value proposition and achieve important metrics with seed stage investment crowdfunding rounds. So this is providing a larger pool of pre-vetted companies as they move to the Series A and later stages where the VCs like to participate. About the same amount of money is now being raised by companies with crowdfunding as is being raised from early stage angel investors, so the available pool of seed stage funded startups is now much larger.
  • Earlier exit opportunities. The investment crowdfunding platforms have begun to create secondary markets for the stock of these startups. Before, it usually took 5 to 10 years for even a very successful startup to be acquired or have an IPO. But now the early investors and startup employees have a new alternative to getting some of their return earlier. They can sell some of their stock as a secondary offering on one of the investment crowdfunding platforms (Microventures.com in Austin has been a leader in this area), or they can use the Federal JOBS Act Regulation A+ to sell up to $50M worth of their stock as an investment crowdfunding round in what is known as a “Mini IPO”. A percentage of the stock can be from early investors and employees.
Both of these developments are helping the VCs to raise money for their own funds and then invest it in startups, because there is a larger pool of pre-vetted startups to put the money to work, and the potential for some quicker returns on investment. The effect of these developments is not that large yet in North Carolina, but I think it will grow into a significant factor here soon as it has in places like Silicon Valley, Austin, Boston, Seattle and Atlanta. So our startup community has a strong future ahead of it.


Saturday, May 19, 2018

Investment Crowdfunding Seminars

A video of the investment crowdfunding seminar we did recently at the American Underground startup accelerator in Durham is now available. We had a large crowd of interested startuppers and small business owners for our lunch and learn session at AU. 

Mark Easley
These seminars are held at various locations around the state in conjunction with our crowdfunding partners. Mark Easley, the publisher and editor of CrowdfundNC.com is the featured speaker, and he discusses how to use the new North Carolina Localstake NC investment crowdfunding platform to get funding for your startup or existing business.

Localstake NC enables startups and existing businesses to conduct a cost effective and professional debt or equity securities offering and get funding from new sources: their community, customers, partners, and supporters.

This seminar will help both entrepreneurs and investors understand these new funding options and how to make use of them. 

You can learn more and sign up for one of our upcoming live seminars on the Events tab.